324 F.

3d 182

William R. MARKLE Appellant

v.
Joanne A. BARNHART, Commissioner of Social Security.
No. 02-3128.

United States Court of Appeals, Third Circuit.

Argued January 28, 2003.
Filed March 26, 2003.
1

Thomas D. Sutton (Argued), Leventhal & Sutton, Langhorne, PA, for

Appellant.

James A. Winn, Regional Chief Counsel, Region III, Rafael Melendez

(Argued), Assistant Regional Counsel, Office of the General Counsel, Social
Security Administration, Philadelphia, PA, Mary Beth Buchanan, United States
Attorney, Paul E. Skirtich, Assistant U.S. Attorney, Western District of
Pennsylvania, Pittsburgh, PA, for Appellee.

Before SLOVITER and RENDELL, Circuit Judges, and DEBEVOISE,* Senior

District Court Judge.

OPINION OF THE COURT

4

DEBEVOISE, Senior District Court Judge.

Appellant, William R. Markle, appeals from an order of the District Court

affirming the decision of the Administrative Law Judge ("ALJ") holding that
Markle is not disabled and entitled to Supplemental Security Income ("SSI")
and granting the Commissioner's motion for summary judgment. We conclude
that the Administrative Law Judge (ALJ) erred when he failed to find that
Markle had a full scale IQ score of 70. We will reverse and remand, directing
the ALJ to complete Step 3 of the evaluation process by developing the record
and determining whether Markle's mental retardation had an onset date before
age 22, in which event he would be entitled to the benefits he seeks.

I. Background

Markle is a 48 year old man. He attended special education classes in school,

completing the ninth grade but dropping out after two months in tenth grade.
He obtained a GED in the 1970s, can read, write, add, subtract, but has
difficulty with multiplication and division. In the remote past he performed
some work painting and wallpapering houses and cutting grass, but performed
no work during the fifteen years prior to his SSI application. At the time of the
administrative hearing he lived alone and independently. He goes out when
necessary, shops, walks around and visits friends and relatives. He takes care of
his apartment and handles all his bills and uses an ATM to access his bank
account.

On February 14, 2001, after the determination of the Pennsylvania Bureau of

Disability Determination but before the ALJ hearing, Markle underwent a
consultative psychological evaluation by James E. Williams, Ph.D., a licensed
psychologist. Dr. Williams noted that there was nothing unusual about Markle's
gait, posture, manner or hygiene and that his general appearance was
appropriate. Markle appeared relaxed and personable throughout the evaluative
process and exhibited no evidence indicative of anxiety or psychopathology. Of
particular significance in the present case is the fact that Markle's IQ test
revealed a verbal IQ score of 73, a performance IQ score of 72 and a full scale
IQ score of 70.

With respect to Markle's ability to make occupational adjustments, Dr.

Williams found that despite being cognitively challenged, he had a good ability
to use judgment, function independently, follow work rules, relate to coworkers, deal with the public, and interact with supervisors, and had a fair
ability to deal with work stresses and maintain attention and concentration.
Markle had a fair ability to understand, remember and carry out complex and
detailed job instructions. Further, Dr. Williams found that Markle had a very
good to unlimited ability to make personal-social adjustments such as
demonstrating reliability, maintaining personal appearance, relating predictably
in social situations, and behaving in an emotionally stable manner.

Markle protectively filed an application for SSI disability benefits. The

Pennsylvania Bureau of Disability Determination denied his claim initially.
Following a timely request, a hearing was held before an ALJ, who denied the
claim. The Appeals Council denied Markle's request for review of the ALJ's
decision. Markle filed suit in the District Court which granted the
Commissioner's motion for summary judgment. This appeal followed.

II. The ALJ and District Court Determinations

10

The ALJ received medical evidence, including Dr. Williams's report, heard
Markle's testimony and received the testimony of a vocational expert.
Proceeding through the five-step evaluation process the ALJ found that Markle
had not worked since filing his application and consequently had not been
engaging in substantial gainful activity (Step 1). He stated that "[c]linical and
objective findings establish chronic obstructive pulmonary disease,
hypertension, obesity, gout and diminished intelligence. These impairments are
not slight and result in more than a minimal effect on the claimant's residual
functional capacity. Consequently, the Administrative Law Judge finds
claimant's impairments severe as set forth in Social Security Ruling 96-3p."
(App. at p. 13) (Step 2)

11

Step 3 of the sequential evaluation process required that the ALJ determine
whether any of Markle's impairments, alone or in combination, met or equaled
a listed impairment as set forth in Appendix 1, Subpart P, Regulations No. 4.
Of importance in the present appeal is the ALJ's determination that Markle did
not satisfy the impairments listed at 20 C.F.R. Pt. 404, Subpt. P, App. 1,
12.05, in particular the impairment listed at 12.05C. The pertinent provision
reads:

12

Mental Retardation refers to significantly subaverage general intellectual

functioning with deficits in adaptive functioning initially manifested during the
developmental period, i.e., the evidence demonstrates or supports onset of the
impairment before age 22. The required level of severity for this disorder is met
when the requirements in A,B,C, or D are satisfied.

***
13
14

C. A valid verbal, performance, or full scale IQ of 60 through 70 and a physical

or other mental impairment imposing an additional and significant work-related
limitation of function.

15

20 C.F.R. Pt. 404, Subpt. P, App. 1, 12.05.

16

The ALJ noted Markle's IQ scores, which met the IQ criteria of 12.05C, but
found that "the results of such testing procedures cannot be taken at face value
in view of the fact that they are inconsistent with the claimant's ability to
independently perform self-care needs, perform various activities of daily
living, and so forth. Of further significance is the fact that despite a limited
special education, the claimant obtained a general equivalency diploma." (App.
at p. 14). The ALJ referred to the various positive observations contained in Dr.

Williams's report and to Markle's own description of the manner in which he

was able to perform successfully the daily functions of his life. He found "that
the claimant's impairments do not meet or equal the severity of Listings 1.00,
3.00, 12.05 or any other listing..." (Id.). He further stated that "[i]n reaching this
conclusion, the Administrative Law Judge has considered the opinion of the
State agency medical consultant who evaluated this issue, and reached the same
conclusion." (Id.)
17

Moving to Step 4 the ALJ reviewed in great detail Markle's testimony and the
extensive medical evidence in the record reflecting Markle's various
impairments. He stated that "[b]ased on the clinical and objective findings of
treating and consulting physicians, and the claimant's range of activities, the
Administrative Law Judge believes that the claimant has exaggerated his
complaints of debilitating pain, shortness of breath, and limitations. The totality
of the evidence, especially the objective and clinical findings of treating and
consulting physicians, rebuts the claimant's contention that he is totally
disabled from all forms of gainful employment." (App. at p. 17). The ALJ
found that Markle has the residual functional capacity to perform a wide range
of simple, routine and repetitive light work activity not involving exposure to
temperature extremes, and excessive wetness, humidity, dust, fumes, gases and
stress. He noted that light work entails lifting no more than twenty pounds at a
time with frequent lifting and carrying objects weighing up to ten pounds,
standing and walking.

18

The ALJ observed that Markle had no past relevant work experience and
proceeded to deal with the Commissioner's burden at step 5 to show that there
are jobs existing in significant numbers in the national economy which Markle
can perform, consistent with his medically determinable impairments,
functional limitations, age and education. In response to the ALJ's hypothetical
question the vocational expert testified that a person having the hypothesized
conditions could perform such light jobs as an inserter, bagger, weigher and
guard, and that a significant number of these jobs existed in the region of
Markle's residence, in the State of Pennsylvania and in the national economy.
The ALJ made the following findings relevant to his step 5 evaluation:

19

Based on an exertional capacity for light work, and the claimant's age,
education, and work experience, Section 416.969 of Regulations No. 16, and
Vocational Rule 202.20, Table No. 2, Appendix 2, Subpart P, Regulations No.
4 would direct a conclusion of "not disabled." Although the claimant's
additional nonexertional limitations do not allow him to perform the full range
of light work, using the above cited rule as a framework for decision making,
there are a significant number of jobs in the national economy which he could

perform. Examples of such jobs are: inserter, bagger, weigher, guard,

cutter/trimmer, assembler, addresser, and packager. These jobs exist in
significant numbers in the immediate area of the claimant's residence as well as
in the national economy.
20

The claimant was not under a "disability," as defined in the Social Security Act,
at any time through the date of this decision (20 CFR 416.920(f)).

21

(App. at p. 20)

22

Had the ALJ found that Markle's impairments met the severity listing under
12.05C, the Step 4 and Step 5 inquiry would have been unnecessary and
irrelevant.

23

In his appeal to the District Court Markle challenged the ALJ's conclusions that
he does not meet a listed impairment, in particular the impairment listed at
12.05C, and that Markle is capable of performing light work.

24

Addressing the listed impairment issue the District Court noted the verbal IQ of
73, the performance IQ of 72 and the full scale IQ of 70, holding, correctly, that
"where verbal, performance, and full scale IQs are provided, the Secretary must
consider the lowest of these scores in conjunction with listing 12.05", and that
"Markle would ordinarily satisfy the IQ guidelines for both 12.05C and
12.05D, given that he has a full scale IQ of 70" (Joint App. at p. 10). Citing
Clark v. Apfel, 141 F.3d 1253, 1255 (8th Cir.1998) and Popp v. Heckler, 779
F.2d 1497, 1499 (11th Cir.1986), the District Court held, again correctly, that
the Commissioner is not required to accept a claimant's IQ scores and may
reject scores that are inconsistent with the record. The District Court concluded
that the ALJ's rejection of the IQ scores was supported by substantial evidence,
including Markle's ability to pay his own bills, add and subtract, use an ATM
machine and to take care of all his own personal needs; Markle's ability to
identify and administer his medication; his previous jobs; his obtaining a GED;
and the positive evaluations of Dr. Williams, the psychologist. Finding that
substantial evidence supported the ALJ's conclusion that Markle's IQ scores do
not accurately reflect his mental ability and that he does not suffer from mental
retardation as that term is used in 12.05, the District Court did not address
Markle's arguments that he also satisfied the other criteria of 12.05C.

25

Turning to Markle's challenge to the ALJ's finding that he can perform light
duty work, the District Court addressed Markle's contention that his treating
physician's, Dr. Jabbour's, conclusion that Markle could sit for less than six

hours in an eight-hour work day and could only occasionally lift and/or carry
ten pounds, was inconsistent with the definition of light work. The District
Court found that substantial evidence supported the ALJ's conclusion that Dr.
Jabbour's limitations were not supported by objective medical evidence, citing
Dr. Jabbour's own detailed medical findings, reports of other physical
examinations and the residual functional capacity assessment completed by the
Pennsylvania agency physician. The District Court rejected Markle's argument
that the hypothetical question that the ALJ posed to the vocational expert did
not incorporate his mental impairment.
26

In a footnote (Joint App. at p.12) the District Court rejected Markle's argument
that the ALJ erred in not completing a psychiatric review technique form,
stating:

27

Markle makes a brief argument that the ALJ was required to complete a
psychiatric review technique form and that he erred in not completing one.
Because such a form was completed at the initial stages of Markle's claim, the
ALJ did not need to complete another one. Rather, he only had to incorporate
pertinent findings and conclusions based on the previously completed form. See
20 C.F.R. Section 416.920a(e). He did so.

28

Markle raises two issues in his challenge to the District Court's decision
affirming the decision of the ALJ, denying Markle's motion for summary
judgment and granting the Commissioner's motion for summary judgment.
First, he asserts that the District Court erred in failing to find that the ALJ
committed an error of law by finding that Markle's mental retardation did not
meet the requirements of 12.05C of the listed impairments, and second, he
asserts the District Court erred in failing to find that the ALJ did not
incorporate in his decision the Psychiatric Review Technique findings required
by the regulations.

III. Jurisdiction and Standard of Review

29

The District Court had jurisdiction under the Social Security Act, 42 U.S.C.
405(g), 1383(c). We have appellate jurisdiction under 42 U.S.C. 405(g) and
28 U.S.C. 1291.

30

The standard of review both in the District Court and in this Court with respect
to findings of fact by the Commissioner is whether there is substantial evidence
to support such findings. 42 U.S.C. 405(g). With respect to the application of
legal precepts, the standard of review in the District Court and in this Court is

plenary.
IV. Discussion
31

To meet the requirements of 12.05C a claimant must i) have a valid verbal,

performance or full scale IQ of 60 through 70, ii) have a physical or other
mental impairment imposing additional and significant work-related limitations
of function, and iii) show that the mental retardation was initially manifested
during the developmental period (before age 22). We conclude that the ALJ's
ruling that Markle had a full scale IQ of greater than 70 was not supported by
substantial evidence.

32

The District Court observed correctly, that an ALJ may reject scores that are
inconsistent with the record. However, the record in the present case does not
provide a basis for the rejection. Obviously Dr. Williams concluded that the
scores he reported were valid, as he did not qualify them or find that they were
inconsistent with the various positive aspects he noted in Markle's appearance,
demeanor and conduct. The ALJ's reliance on the opinion of the State medical
agency consultant was misplaced, because the consultant did not have available
to him Dr. Williams's report and Markle's IQ scores. There was no expert
opinion of a psychologist or medical person to contradict Dr. Williams's IQ
findings. "An ALJ cannot reject IQ scores based on personal observations of
the claimant and speculative inferences drawn from the record." Morales v.
Apfel, 225 F.3d 310, 318 (3d Cir.2000).

33

The various activities in which Markle is able to engage are not inconsistent
with qualifying mental retardation. In a similar case the Sixth Circuit Court of
Appeals rejected the Commissioner's argument that a claimant's full scale IQ of
68 was inconsistent with, among other things, his driver's license and work
history as a truck driver, limited literacy and sixth grade education, and ability
to make change, do laundry and clean his room. Brown v. Sec'y of HHS, 948
F.2d 268, 270 (6th Cir.1991); see also, Hodges v. Barnhart, 276 F.3d 1265
(11th Cir.2001).

34

The cases upon which the District Court relied are readily distinguishable from
the circumstances of the present case. In Clark v. Apfel, supra, the Eighth
Circuit Court of Appeals held that the ALJ properly rejected the validity of the
claimant's performance IQ of 66 and full scale IQ of 67 where she had worked
in the private sector, had a driver's license and was the primary caretaker of her
young daughter and had completed ninth grade without special education
services. In Popp v. Heckler, supra, the Eleventh Circuit Court of Appeals held
that the ALJ did not have to accept scores in the listing range for a claimant

who had a two-year college degree, was enrolled in a third year of college, and
had a history of several skilled jobs including teaching algebra at a private
school. By contrast, here, the record evidence did not necessarily undermine
the validity of Markle's reported IQ scores.
35

The ALJ found that "[t]he medical evidence establishes that the claimant has
severe chronic obstructive pulmonary disease, hypertension, obesity, gout, and
diminished intelligence," and that these severe impairments restrict him to a
limited range of light work. These findings establish the second criterion for
entitlement under 12.05C, a physical or other mental impairment imposing
additional and significant work-related limitations of function.

36

Several courts of appeals have held that a finding of a severe impairment

establishes the second prong of 12.05C, e.g., Luckey v. U.S. Dept. of HHS,
890 F.2d 666, 669 (4th Cir.1989); Fanning v. Bowen, 827 F.2d 631, 633 (9th
Cir.1987). In Williams v. Sullivan, 970 F.2d 1178, 1186-89 (3rd Cir.1992), we
alluded to the requirement of "a physical or other mental impairment imposing
additional and significant work-related limitation of functions", but it was
unnecessary to frame a definition because we had decided that the claimant's
evidence was insufficient to show that he was mentally retarded prior to age 22.
However, more recently the Commissioner in new regulations on the
evaluation of mental disorders addressed the second prong of 12.05C, stating
that "[w]e always have intended the phrase to mean that the other impairment is
a "severe" impairment as defined in 404.1520(c) and 416.920(c)." Revised
Medical Criteria for Evaluating Mental Disorders and Traumatic Brain Injury,
65 Fed.Reg. 50746, 50772 (August 21, 2000). Even absent the Commissioner's
clarifying regulation, the severity of Markle's other impairments (obstructive
pulmonary disease, hypertension, obesity and gout) which limit him to some
forms of light work constitute impairments "imposing additional and significant
work-related limitations of function."

37

Because the ALJ did not find that Markle had a sufficiently low IQ to qualify
for a 12.05C listed impairment, he did not inquire into the third requirement
for such an impairment, namely, whether Markle's mental retardation was
initially manifested during his developmental period.

38

In recent years several courts of appeals have applied a rebuttable presumption

that a current mental impairment existed before age 22, and Markle asks us to
apply that standard. See e.g., Hodges v. Barnhart, supra. In Williams v.
Sullivan, 970 F.2d 1178 (3d Cir.1992) our court did not apply a presumption,
but held that the claimant had a burden of establishing that his mental
retardation commenced during the developmental period, and, in that case, had

failed to meet that burden. Although a different result might be suggested by the
subsequently enacted August 21, 2000 Revised Medical Criteria (quoted
below) which were in effect when cases applying the presumption were
decided, we are not at liberty to hold that such a presumption exists.1 We note,
however, that Williams is readily distinguishable from the present case because
there was evidence in Williams supporting a finding that the retardation was of
recent origin.2 Here, the evidence before the ALJ is consistent with a finding
that Markle's mental condition remained constant from childhood through the
present, the only change being that his physical condition worsened as the years
went by. There is no evidence of a long work history as there was in
Williams or of a traumatic event that might have induced mental retardation
at a later stage of life.
39

In its August 21, 2000 Revised Medical Criteria for Evaluating Mental
Disorders and Traumatic Brain Injury the Commissioner's comments included
the statement that "We did not intend the second paragraph of proposed listing
12.05 to require intelligence testing (or other contemporary evidence prior to
age 18 [now age 22])." The comment proceeded to state:

40

The proposed listing, as in the prior rules, stated that the significantly
subaverage general intellectual functioning with deficits in adaptive behavior
must have been initially "manifested" during the developmental period. We
have always interpreted this word to include the common clinical practice of
inferring a diagnosis of mental retardation when the longitudinal history and
evidence of current functioning demonstrate that the impairment existed before
the end of the developmental period. Nevertheless, we also can see that the rule
was ambiguous. Therefore, we expand the phrase setting out the age limit to
read: "i.e., the evidence demonstrates or supports onset of the impairment
before age 22."

41

Id.

42

Given Williams, it is clear that the record should contain some evidence that
supports the finding that onset preceded age 22. Here there is evidence that is at
least consistent with, and, depending on one's interpretation, could be said to
support early onset. There is nothing in Dr. Williams's report to suggest that
retardation originated after age 21. In school Markle took special education
courses through ninth grade, dropping out after two months in the tenth grade.
He "struggled" to obtain a GED in the 1970s. He has not held a job for at least
fifteen years, and his work before that was limited to some painting and
wallpapering of houses and cutting grass.

43

However, the ALJ never addressed this issue, because the injury concluded
with a denial of benefits based on the first prong. In such a situation, in light of
the Supreme Court's recent ruling in INS v. Ventura, ___ U.S. ___, ___, 123
S.Ct. 353, 355, 154 L.Ed.2d 272 (2002), it is incumbent upon us to remand to
the agency for it to address the issue in the first instance. In Ventura, the Court
noted both the agency's expertise and first-hand knowledge of the record, as
well as its ability to expand the record if needed, as the bases for requiring
remand. We note that here the ALJ may well believe on remand that he should
develop the record further as is his duty and inquire further into the
nature of Markle's special education, or obtain an expert opinion as to the likely
onset of the retardation. Accordingly, we will remand the matter to the ALJ so
that he can provide his interpretation of the record on this issue, develop the
record further, and make a finding whether Markle meets the third element of a
12.05(C) listed impairment, namely, whether his retardation commenced
before age 22.

44

Because the case will be remanded for further proceedings it is unnecessary to

address Markle's contention that the ALJ did not incorporate in his decision the
Psychiatric Review Technique findings required by the regulations. Such
deficiency, if it exists, can be remedied in a future decision.

V. Conclusion
45

We have concluded that the ALJ's finding that Markle did not possess a full
scale IQ of 70 was not supported by substantial evidence. The case will be
remanded for further proceedings in accordance with the foregoing opinion.

Notes:
*

Dickinson R. Debevoise, Senior United States District Judge for the District of
New Jersey, sitting by designation

See Third Circuit IOP 9.1 (setting forth the policy that holdings in published
opinions are binding on subsequent panels, and that court en banc consideration
is required to overrule them).

A major factor suggesting that Williams's mental retardation was of more

recent origin was his work history: "Williams's mental retardation is further put
into doubt by the fact that Williams did, in fact, maintain a job for most of his
adult life."Id. at 1185. The Court noted the ALJ's observation that "`[i]t may
well be that the claimant has suffered a decrease in his intellectual ability

recently due to his marked reduction in activity.'" Id.